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Hello, it’s Thursday, October 25, 2012, and I’m Martin Smith with the daily outlook
from UFX Markets.
The US Dollar traded mixed versus most of the major currencies. Purchases of new homes
in the U.S. rose in September to 389K, the highest level in the past two years. The Interest
Rate came out as expected at 0.25%. Today, Core Durable Goods Orders are expected, along
with Unemployment Claims and Pending Home Sales. Wall Street closed the trading day
with a slight declines after Fed remarks about high. The Dow Jones fell by 0.22%, Nasdaq
by 0.42% and S&P 500 lost 0.16% from its value.
Gold dropped to 1,700 and Crude Oil fell to three month low, closing at 85.70$ a barrel.
The Euro was almost unchanged versus the Dollar despite disappointing macro data. French Manufacturing
PMI came out at 43.5 worse than expected 43.9, with Germany doing little better. The EUR/USD
has a double bottom support at 1.2930 which could indicate a trend reversal towards 1.3020.
If it fails to sustain this position, the EUR/USD will in all likelihodd maintain the
negative trend to 1.2870. No major economic data is expected today.
The Cable gained against the Dollar in expectation of good Prelim GDP. On the 4-hour chart the
pair is still struggling to cross the 50% Fibonacci retracement line at 1.6045. Breaching
this could lead the pair to 1.6080. Today, Prelim GDP is expected to be released at 0.6%
vs. -0.4% previously.
The Canadian Dollar declined against most of the major currencies after the BOC Governor
Carney mentioned that interest rates are not expected to rise anytime soon. USD/CAD could
not breach 0.9960 and according to the RSI the pair is in an overbought condition, which
could bring a retracement. However, as long as the pair remains below 0.9960 the trend
will in all likilihood remain negative. No economic data is expected today.